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by Koos van der Merwe
Blackberry - the name is known to all, because it was once the cellphone of choice with the nickname, Crackberry.
Position: Accumulate
Koos van der Merwe
Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.
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CUP WITH HANDLE
Blackberry - Crackberry
01/23/14 03:12:46 PMby Koos van der Merwe
Blackberry - the name is known to all, because it was once the cellphone of choice with the nickname, Crackberry.
Position: Accumulate
| If you do not know what a Blackberry is, then you are young, part of the iPhone generation. The Blackberry became the most popular cellphone because of its keyboard which allowed users to easily type in text messages to friends and family. When the iPhone hit the market with its hundreds of apps, Blackberry took a dive. Copycats all over the world copied the iPhone. Blackberry phones became history. However, users failed to remember that the Blackberry keyboard is a pleasure to use. Also, the company offers a security unmatched by any other device. Even President Obama prefers a Blackberry because of its security. The company boasts, "our rock solid security can't be matched," and they are correct. With the recent change in management, Citron Research, a firm that specializes in searching out short-selling opportunities, has written a new report that actually makes a bullish case for BlackBerry (BBRY) going forward and even assigns the company's shares a price target of $15. Is it time to start loading up on BBRY? |
|
| Figure 1. Monthly chart showing rise and fall. |
| Graphic provided by: AdvancedGET. |
| |
| The chart in Figure 1 is a monthly chart and shows how the share price rose from a low of 94 cents in 1999 moving up to $43.72 by February 2000 before collapsing as the technology bubble burst to a low of $1.57 by September 2002. From that level it rose in a 5 wave pattern to $150.50 by June 2008. The first Apple iPhone was released on June 29, 2007, when the share price of BBRY was $89.98. The Apple iPhone 3G was released in June 2008, when BBRY share price was $150.50. The iPhone 3G was so successful, that BBRY share price dropped like a stone — within six months to a low of $44.98 by December 2008. |
|
| Figure 2. Daily chart showing cup and handle pattern. |
| Graphic provided by: AdvancedGET. |
| |
| The daily chart in Figure 2 shows a gap that formed on June 27, 2013 as the price fell to $8.81 by July 30, 2013. The price rose, then fell further to a low of $5.78 by December 10, 2013. On November 25, 2013 the new executive chairman and interim CEO John Chen began an extensive purge of the company's top ranks. The price started recovering in December 2013, and has recovered to $9.98 at the time of writing this article. However, the chart does show an overbought RSI indicator, suggesting that a correction could occur in the near future. The cup & handle formation is suggesting a target of $11.20. (8.49 - 5.78 = 2.71 + 8.49 = 11.20). |
|
| Figure 3. Omnitrader chart showing BUY signal. |
| Graphic provided by: Omnitrader. |
| |
| The chart in Figure 3 is an Omnitrader chart and shows that the program gave me a buy signal for BBRY based on the Red Green Startegy Long Stop and Red Green Startegy Long 6, on December 9, 2013. The advisor rating as shown on the chart is 73, which is strong. The chart shows that the price is testing the upper external band, suggesting possible weakness. The TDI Jak Indicator is starting to turn suggesting that a sell signal could be given soon. The RSI indicator is overbought, but has not given a sell signal. Volume is strengthening, suggesting further rise ahead. I would not be a buyer of BBRY at present levels, but I would be a buyer on any future correction. |
Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.
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| E-mail address: | petroosp@gmail.com |
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Comments
Date: 01/28/14Rank: 5Comment: This article had excellent technical analysis. The volume has increased, since the date written indicating high interest and high day trading. Would like to see a follow up on Blackberry during the market correction.
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